Taxation: Italy – refund of unduly
paid taxes

The Commission has issued a Reasoned Opinion to Italy for not having
introduced measures implementing the decision of the Court of Justice in case
C-129/00, where certain aspects of the Italian legislation concerning the refund
of unduly paid tax were found incompatible with Community law. The Reasoned
Opinion has been issued in the framework of the infringement procedure enshrined
in Article 228 of the EC Treaty.

According to Article 228 of the EC Treaty "If the Court of Justice finds that
a Member State has failed to fulfil an obligation under this Treaty, the State
shall be required to take the necessary measures to comply with the judgment of
the Court of Justice".

With the decision of 9 December 2003 in case C-129/00, the European Court of
Justice found that Italy had failed to fulfil its obligations under the EC
Treaty.

Refund system of unduly paid taxes in Italy was construed and applied by the
administrative authorities and a substantial proportion of the courts, including
the Italian Supreme Court, in such a way that the exercise of the right to
repayment of charges levied in breach of Community rules was made excessively
difficult for the taxpayer.

The main difficulties consisted in the conditions which the Italian
legislation required in order to prove that the burden of the tax had not been
passed on to other persons.

Since Italy did not enforce a legislation which effectively bans the recourse
to any presumption in order to give evidence that the burden of proof has not
been passed to another person, the Commission has decided to sent to Italy a
letter of Formal Notice and subsequently a Reasoned Opinion according to Article
228 of the EC Treaty.

If the case is ultimately brought before the Court of Justice, Article 228
entitles the Commission to specify the amount of the lump sum or/and penalty
payment to be paid by the Member State concerned which it considers appropriate
in the circumstances.

Commission cases' reference numbers is 1995/2166 (Italy)New: For
the press releases issued on infringement procedures in the taxation or customs
area see: